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    Journal entries and trial balance

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    3-15: Compute the missing amounts for companies A, B, and C.

    A B C
    Cash . . . . . . . . . . . . . . . $45,000 $ 4,500 $18,000
    Accounts receivable . . . . . . . . 10,000 10,000 14,000
    Land and buildings . . . . . . . 75,000 ? 50,000
    Accounts payable . . . . . . . . . . ? 12,000 28,000
    Mortgage payable . . . . . . . . . 60,000 17,000 22,000
    Owners' equity . . . .. . . . . . . 45,000 15,000

    3-16: From the information provided, determine:
    1. The amount of retained earnings at December 31.
    2. The amount of revenues for the period.
    Totals January 1 December 31
    Current assets . . . . . . . . . . . . . . $ 10,000 $ 15,000
    All other assets . . . . . . . . . . . . . . 190,000 180,000
    Liabilities . . . . . . . . . . . . . . . . . 65,000 45,000
    Capital stock . . . . . . . . . . . . . . . . 60,000 ?
    Retained earnings . . . . . . . . . . . . . . 75,000 ?
    Additional data:
    Expenses for the period were $75,000.
    Dividends paid were $11,500.
    Capital stock increased by $10,000 during the period.

    3-17: Make the journal entries necessary to record the following eight transactions.
    a. Purchased inventory on account for $130,000.
    b. Sold goods for $100,000 cash. The goods originally cost $65,000.
    c. Paid $27,000 cash for employee wages.
    d. Paid $12,500 cash for advertising.
    e. Sold goods for $25,000 cash and $60,000 on account (a total of $85,000). The goods originally cost $57,000.
    f. Collected cash of $47,000 from the $60,000 receivable on account; the remaining $13,000 is expected to be collected later.
    g. Paid cash of $55,000 on the $130,000 payable on account; the remaining $75,000 is expected to be paid later.
    h. Paid cash dividends of $8,500.

    3-18: Refer to the journal entries made in Practice 3-17. Construct a T-account representing each account impacted by those eight transactions. Post all of the journal entries to these T-accounts. Compute the ending balance in each account. Assume that the beginning balance in each T account is zero.

    3-19: Refer to the T-accounts constructed in Practice 3-17 and Practice 3-18. Using the ending balances in those T-accounts, construct a trial balance. Note: The only account that is common to these two sets of T-accounts is the cash account; add the two cash account balances together to get the total balance.

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    Solution Preview

    3-15: Compute the missing amounts for companies A, B, and C.
    A B C
    Cash . . . . . . . . . . . . . . . $45,000 $ 4,500 $18,000
    Accounts receivable . . . . . . . . 10,000 10,000 14,000
    Land and buildings . . . . . . . 75,000 ? 50,000
    Accounts payable . . . . . . . . . . ? 12,000 28,000
    Mortgage payable . . . . . . . . . 60,000 17,000 22,000
    Owners' equity . . . .. . . . . . . 45,000 15,000 ?

    Normally, total assets equal to total liabilities plus total equity. Therefore, we can find the missing amounts by using the following equation.

    Total assets = Total Liabilities + Total Equity
    Cash + Accounts receivable + Land and buildings = Accounts payable + Mortgage payable + Owners' equity

    Company A
    45,000 + 10,000 + 75,000 = Accounts payable + 60,000 + 45,000
    130,000 = Accounts payable + 105,000
    Accounts payable = 25,000

    Company B
    4,500 + 10,000 + Land and buildings = 12,000 + 17,000 + ...

    Solution Summary

    This solution is comprised of a detailed explanation to find the missing amount, prepare the journal entries and trial balance for the given accounting transactions.

    $2.19